No Robust Evidence that Market Liberalization Harms Worker Rights: New Evidence from Panel Regressions and Event Studies

Abstract Debate over whether market liberalization protects or weakens worker rights seems to remain unsettled. Although there are indications of a negative effect, existing evidence is generally mixed and often limited by older samples and designs vulnerable to endogeneity. Exploiting two different datasets, this paper re-examines the relationship in a global panel with larger than usual temporal coverage. I estimate country fixed-effects and first-difference models, then apply synthetic difference-in-differences event studies based on discrete jumps in economic freedom to strengthen causal identification. Baseline bivariate models show negative associations between economic freedom and worker-rights outcomes, but these estimates attenuate and become mostly null after covariate adjustment. Component models are likewise mostly null, with limited evidence of short-run deterioration in practices for trade liberalization. Event study estimates do not show robust post-treatment shifts in worker-rights laws or practices. Overall, average effects appear smaller and less uniform than much of the prior literature suggests.